Buying a flat with tenants- contract advice

[Deleted User]

Pixie5740 wrote: »

The OP was already warned not to do this but he knew it all back then and he knows it all now.

https://forums.moneysavingexpert.com/discussion/5382316

I think you're wasting your time trying to have things written into the contract. If you exchange and the vendor cannot complete with vacant possession then you're already covered. I would be very surprised if the vendor's solicitor let him exchange with tenants in-situ though. I would also be surprised if your solicitor allowed this as your solicitor will also be working for the mortgage lender.

Ah, the old 'dredge through OP's other posts to try and make them look stupid'- another MSE forum classic!

I didn't 'know it all then' and I don't 'know it all now'- hence me on here asking for advice.

All I wanted to know is if what is currently written into the contract is enough to cover me or if I'd need anything extra, but it seems like it is. Thanks to all the constructive replies.

Also I am a 'she' not a 'he'- not that it matters, but interesting that's your default assumption.

J_i_m

I think you'd be better served discussing all this in depth with your solicitor.

[Deleted User]

Thanks Jim. I will of course be doing that but we received the contract yesterday and they aren't open until Monday, I was just hoping for some advice or experience in the meantime.

paddy's_mum

[Deleted User] wrote:

is ..what is currently written into the contract is enough to cover me or if I'd need anything extra

What's written into the contract is of no relevance. It could run to 900 pages, it could have acres of explanatory notes all written in calligraphic Latin - no solicitor worth his hire is going to compromise the mortgage company in the set-up you describe.

If by some remote chance he does let exchange go ahead, be prepared for everything to blow up in your face as the mortgagors slam on the brakes and start legal action.

£20 to a charity of your choice if I'm mistaken.

[Deleted User]

Thanks paddy's mum. I have spoken directly to the lender who have confirmed that they are happy for exchange to take place under these circumstances. Completion however cannot happen until there is vacant possession.

davidmcn

mrginge wrote: »

Will the lender allow your solicitor to exchange without vacant possession?

paddy's_mum wrote: »

Your solicitor would be opening himself up to all kinds of disciplinary proceedings if he goes ahead risking the mortgage companies money by exchanging on a property where it is highly likely that completion will be thwarted.

The lender won't care what the position is at exchange - only whether vacant possession is actually being provided at completion.

mrginge

if I was the tenant and I knew that this ridiculous plan was going on, I'd be sitting tight until the vendor made me a very attractive offer to help them out with their contractual obligations.

kinger101

On the mortgage issue, the lender won't release the funds without vacant possession. Technically, this does not present a barrier to exchange; it just puts the purchaser in a very dangerous place. Provided the solicitor has informed their client of the risks, they'd not be doing anything wrong if their client insisted on exchanging contracts.

Even when you exchange under normal circumstances, there's no cast iron guarantee the bank will release money anyway. For example, someone might get a mortgage offer and load up on consumer debt afterward. The bank might then decline the mortgage when they make their finals checks before releasing funds.

HappyMJ

mrginge wrote: »

if I was the tenant and I knew that this ridiculous plan was going on, I'd be sitting tight until the vendor made me a very attractive offer to help them out with their contractual obligations.

Or you could stay in occupation and incur court costs. It costs £280 to start a claim in the county court if a tenant fails to leave if a valid section 21 notice has been issued to the tenant and this can in most cases be passed on to the tenant. It then costs £110 to issue a warrant for possession.

mrginge

davidmcn wrote: »

The lender won't care what the position is at exchange - only whether vacant possession is actually being provided at completion.

CML 6.5 requires the solicitor to advise the lender if there is 'doubt' about the ability to provide vacant possession. It does not specifically state that such doubt applies only to the point of completion.

The lender therefore does care what the position is before completion. They may be prepared to accept the position, but that is not a definite.